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China's Nobel laureate Liu Xiaobo died Thursday after a battle with cancer, remaining in custody until the end as officials ignored international pleas to let him spend his final days free and abroad.

The prominent democracy advocate died aged 61, more than a month after he was transferred from prison to a heavily-guarded hospital to be treated for late-stage liver cancer.

Liu's death puts China in dubious company as he became the first Nobel Peace Prize laureate to die in custody since German pacifist Carl von Ossietzky, who passed away in a hospital while held by the Nazis in 1938.

International tributes poured in for a "hero" of democracy while human rights groups accused the government of "cruelty".

"We find it deeply disturbing that Liu Xiaobo was not transferred to a facility where he could receive adequate medical treatment before he became terminally ill," the Nobel committee said in a statement.

"The Chinese government bears a heavy responsibility for his premature death."

The legal bureau in the northeastern city of Shenyang said on its website that Liu succumbed to multiple organ failure, three days after being taken into intensive care at the First Hospital of China Medical University. The official Xinhua news agency, which had not mentioned his hospitalisation, reported his death in English.

Shortly after the announcement, the street in front of the hospital was nearly empty, with a dozen plainclothes men standing guard just outside a gate.

The writer's death silences a government critic who had been a thorn in the side of the authorities for decades and became a symbol of Beijing's growing crackdown on dissenting voices.

Liu was detained in 2008 after calling for democratic reforms and he was sentenced to 11 years in prison for "subversion" a year later.